January 13, 2009

Easy ways to Make Money: Investor Calls

Many listed companies will setup an investor call every quarter to allow shareholders and others to ask questions about the company's latest financials and overall health. Investor calls are often skipped by the common investor as they are thought to be too technical or too involved. But, to pull a Yogi Berra, "you can hear a lot by listening". So what if you don't know what a tipping point ratio is, so what if you don't understand what the market bend is, it does not matter in the least. Listen to how the people in these calls talk as much as you listen to what they say.

The execs they march out for these calls are salesmen here to persuade investors to buy their company's stock, if you don't feel sold after a call it is probably by no shortcoming of your own- pay attention to that gut feeling. There have been some phenomenal details revealed (purposely and accidentally) in more than one of these calls. In an Enron call just prior to the collapse one exec went as far as to call an investor an "a**hole" after asking being a tough question- think he was trying to cover up an obvious problem in the company?
Another call I remember sitting in on involved an exec being asked if he thought his company would survive the year, his response was something to the effect of "Well John that is a tough question...". I ran for the door.

There is also another opportunity for the common investor with these calls- listening to other analysts before they recommend a buy or sell. Listen to the questions they ask, are they focusing in on one area of business and asking a lot of questions- perhaps this is something you should look at more deeply. Are the analysts upbeat? Maybe they are all going to post positive buy rating on the company.

At the end of the day do not skip the call because you are afraid of not understanding the nature of the call. When you consider the amount of time you spend deciding if you want to buy a company an extra hour or two listening to an exec and some analysts talk is pretty insignificant, pick up that phone and listen in you never know you might just hear something!